Foreign investment has reached a peak not seen in 30 months, soaring by an impressive 84% to stand firmly at Rs501.30 billion. This surge contrasts sharply with the dismal investment figures recorded just a year ago in June 2023, which stood at Rs272.54 billion.
The uptick in foreign investments correlates with the performance of Pakistan’s benchmark KSE 100-Index, which recently surpassed the 74,000-point mark. This bullish trend reflects renewed optimism and investor interest in Pakistani assets, fueled by positive economic indicators and ongoing discussions with the International Monetary Fund (IMF) for a new loan package.
According to a report by The Express Tribune, market analysts and industry experts attribute this resurgence to several factors. They cite the positive impact of recent IMF loan programs, continued investor confidence leading up to the next IMF package discussions in June-July 2024, and historical data indicating robust returns during periods aligned with IMF programs.
Experts also highlight the stable economic and currency environment as key factors attracting foreign funds into Pakistani equities and debt markets. With stable economic fundamentals and prospects of above-average returns, Pakistan is seen favorably by global investors seeking profitable opportunities.
Data from the State Bank of Pakistan (SBP) confirms this positive trend, showing a substantial increase in foreign investment across various sectors. Investments in PSX shares have surged to Rs449.24 billion, up significantly from Rs271.45 billion in June 2023.
This renewed interest extends beyond equities, with investments in other sectors also experiencing a notable uptick, indicating broader confidence in Pakistan’s economic prospects.
Foreign investors’ focus on government debt securities signals growing optimism in the stability of Pakistan’s fiscal policies and currency management. The stable rupee-dollar exchange rate and confidence in the central bank’s maintenance of its benchmark interest rate at record highs further support this trend.
Looking ahead, industry experts anticipate further positive momentum in Pakistan’s markets, predicting potential interest rate cuts starting in June 2024 after a sustained period of high inflation. This adjustment is expected to drive up share prices, leading to a bullish trajectory in the PSX benchmark KSE 100-Index, with projections reaching around 85,000 points by December 2024 and potentially exceeding 105,000 points by June 2025.
The resurgence of foreign investments reflects a growing consensus among global investors on Pakistan’s economic resilience and potential for sustained growth, positioning the country as an attractive destination for international capital inflows.
